Shares in Ashtead Group PLC (LON:AHT) pushed ahead today, rallying after falls earlier this week, as Credit Suisse "materially" raised its target price and estimates for the blue chip equipment hire firm.
In a note to clients, analysts at the Swiss Bank retained a ‘neutral’ rating on the stock but raised their target price to 1,520p a share, up from 1,150p previously.
They said that following on from Ashtead's consensus-beating second quarter results, published on December 6, they also raised their full-year 2017 earnings per share estimates for the group by 8%.
However, they added, their full-year 2018 and 2019 forecasts have been raised by a much more meaningful 18% and 30% respectively, reflecting a stronger demand outlook in the wake of the election of Donald President as the next US president
The analysts said: “As we noted over the summer, the outlook for US non-residential construction activity had already begun to improve and it seems likely, based on the policies of president-elect Trump (as he and his appointees have articulated them), that construction activity is likely to receive a direct and indirect boost from fiscal stimulus and confidence around the benefits of domestic job creation in the near-to-medium term.”
In late morning trading, Ashtead shares on the FTSE 100 index were up 12p at 1,572p.
Shares in the company have rallied by almost a quarter since Trump was elected amid bets that the incoming president will deliver on his $1tln infrastructure spending plans.
But the stock took a tumble earlier this week after a former house broker, UBS downgraded its rating for Ashtead to ‘sell’ as they questioned whether projects of such a scale actually existed.